Sunday, February 15, 2009

Trump Quits Trump Entertainment, Bankruptcy Possible (Update3)

By Beth Jinks

Donald Trump resigned from the board of Trump Entertainment Resorts Inc., the debt-laden casino company he founded, ahead of a possible involuntary bankruptcy filing next week.

“I’m not managing it, it’s not me that’s responsible for managing,” Trump, who was chairman, said in a telephone interview today. “Unless we’re going to be responsible for management it’s just not something that’s worthwhile.”

Trump’s departure comes ahead of a Feb. 17 deadline to make a $53 million bond payment originally due on Dec. 1. The Atlantic City, New Jersey-based casino operator said at the time it needed to conserve cash and hold debt-restructuring talks with lenders. Since an initial grace period ended on Dec. 31, Trump Entertainment’s deadline has been extended four times.

The 62-year-old real estate entrepreneur has “no idea” whether there will be a bankruptcy filing, he said. Trump is “not thrilled” the company may continue to use his name.

Bondholders are planning to force Trump Entertainment into Chapter 11 bankruptcy early next week, the Wall Street Journal reported today, citing unidentified people familiar with the matter.

Trump controls 28 percent of the stock, according to a March 21 regulatory filing. His daughter, Ivanka Trump, also resigned, according to an e-mailed statement.

“I strongly disagree with the bondholders’ decisions and actions,” Trump said in the statement without elaborating.

Tom Hickey, a spokesman for Trump Entertainment, and Chief Financial Officer John Burke didn’t return phone messages left after normal business hours.

‘It’s a Disaster’

In the interview, Trump cited the “disastrous” fates of Atlantic City’s Tropicana Casino Hotel and the under-construction but not fully funded Revel Entertainment LLC project.

“It’s a disaster and I see what’s happened with so many others, and I don’t want to be a part of it,” Trump said.

Tropicana Entertainment LLC was pushed into bankruptcy after being stripped of its New Jersey gambling license. State officials said in December 2007 that the Tropicana Casino Hotel’s service and cleanliness had declined and the property wasn’t being run according to state regulations.

Revel Entertainment last month suspended interior work, unable to secure needed financing to finish construction at the 20-acre boardwalk site. Revel had been scheduled to open mid- 2010.

Trump Entertainment’s three casinos have been through bankruptcy twice. Holders of most of company’s $1.25 billion in notes and Beal Bank Nevada, which is owed $490 million, have agreed not to exercise default rights for interest or principal payments until 9 a.m. New York time on Feb. 17.

‘Bad Decisions’

The company’s market value has tumbled to $7.3 million from its peak at $842 million in August 2005.

Trump Entertainment’s 8.5 percent note due June 2015 traded at 14 cents on the dollar today, according to Trace, the bond- pricing system of the Financial Industry Regulatory Authority.

Bondholder representatives “have made a series of bad decisions and encouraged wasteful spending, which has led to severe problems within the company,” Trump said in the statement. “The company is no longer operated to a standard consistent with other of my holdings.”

Trump offered to buy the rest of the company and was turned down by bondholders, according to the statement. Legal and consulting fees “will suck the blood from the company,” as Atlantic City “tanks and competition from local markets grows,” he said.

Atlantic City

Gambling revenue in the seaside resort city fell a record 7.6 percent in 2008, the second straight annual decline as the recession deterred some gamblers, and slot-machine competition from nearby states wooed others. The decline continued in January, with revenue down 9.4 percent.

MGM Mirage last year shelved its planned Atlantic City development, and real-estate developer Curtis Bashaw and former Caesars Entertainment Inc. chief Wally Barr withdrew their building application for a casino resort last month.

Penn National Gaming Inc. said Feb. 5 it won’t exercise its option to buy a 23-acre site in Atlantic City, citing the revenue declines and more future competition from Las Vegas Sands’ under- construction casino in Bethlehem, Pennsylvania, and expectations Philadelphia will open casinos.

Past Bankruptcy

Trump Entertainment emerged from bankruptcy 3 1/2 years ago. Its predecessor, Trump Hotels & Casino Resorts Inc., sought court protection in November 2004. It had lost money for nine years because of high interest payments that Trump claimed prevented the company from refurbishing and expanding its casinos.

The three casino resorts also went through bankruptcy in the 1990s.

Trump Entertainment said Oct. 28 that it renegotiated the sale of its Trump Marina to Coastal Marina LLC down to $270 million, from the $316 million agreed upon in May, after the buyer missed a financing deadline.

The company’s biggest bond investors include Franklin Mutual Advisers Inc., Northeast Investors Trust and Massachusetts Financial Services, according to compiled by Bloomberg.

Representatives of bond investors Northeast Investors Trust, Putnam Investments LLC and the John Hancock High Yield Fund couldn’t be reached for comment after business hours.

Bondholders hired Stroock & Stroock & Lavan LLP law firm to file the involuntary bankruptcy documents, the Wall Street Journal said. Houlihan Lokey Howard & Zukin are financial advisers, according to the newspaper.

Trump Entertainment hired law firm Weil Gotshal & Manges LLP as bankruptcy counsel, the Journal said.

Original here

Salmonella-hit peanut company files for bankruptcy

By Phil Wahba and Emily Chasan

NEW YORK (Reuters) – Peanut Corporation of America sought bankruptcy protection on Friday after a salmonella outbreak traced to one of its plants led to one of the biggest product recalls in U.S. history.

The company filed a Chapter 7 bankruptcy petition in the U.S. Bankruptcy Court for the Western District of Virginia, saying the negative economic effects of the recalls have been "extremely devastating" to its financial condition.

Under Chapter 7 companies liquidate their assets to repay creditors rather than reorganize.

The salmonella outbreak that has sickened 600 people, more than half of them children, and may have killed nine people, has been traced to a plant in Blakely, Georgia operated by Peanut Corporation.

More than 1,800 products have been recalled since mid-January due to the outbreak, either because they were linked to Peanut Corporation or because such links could not be ruled out.

Peanut Corporation is a peanut processing company and maker of peanut butter for bulk distribution to institutions and private label companies.

The owner of Peanut Corporation, Stewart Parnell, refused to answer questions before Congress on Wednesday citing rights under the U.S. Constitution. A Congressman at the hearing displayed internal company e-mails showing Parnell complaining about lost profits while the scare was being investigated.

Federal Bureau of Investigation officials in Atlanta and Virginia said earlier this week they had joined the U.S. Food and Drug Administration in a criminal investigation of the company.

Inspections showed the company not only had several tests that showed salmonella contamination, but also cockroaches, a leaky roof and filthy equipment, the FDA has said.

The company said in court documents that it had hired turnaround firm The Finley Group to initially help it consider Chapter 11 protection, which would have allowed it to reorganize under bankruptcy protection or try to sell parts of its business as a going concern.

Peanut Corporation listed assets in the range of $1 million to $10 million and liabilities in the same range, according to court documents.

The case is In re: Peanut Corporation of America, U.S. Bankruptcy Court, Western District of Virginia, No. 09-60452

Original here

Your former boss may fight your benefits claim

Adding insult to injury, employers are opposing unemployment benefits claims in record numbers, The Washington Post reports.

Imagine being among the multitudes getting pink slips, applying for benefits that will help you keep your home -- and then getting notice that your former company contends you're not entitled because you were let go for misconduct or that you quit. Protests are being filed by former employers in more than a quarter of all new benefits claims, the Post says.

It's challenging enough to qualify for unemployment benefits. Many people, particularly those who worked part-time jobs, don't. (But please do check. You can do this easily over the phone or online.)

Let's say you meet the qualifications. Apply right away. The state will determine your eligibility. If you lost your job to downsizing, you're golden. Also, incompetence is generally not considered misconduct. You're also entitled if you quit for good cause.

Stay positive. Even if your former employer protests, The Post says employer challenges are successful only about a third of the time.

"Just because your employer cites some rule violation as the reason for your termination does not necessarily mean that you were fired for ‘cause' or misconduct, and that you won't be entitled to unemployment compensation," says Workplace Fairness. Remember, the rules vary from state to state.

You may have thought it's unlikely that an employer would protest because the benefits are paid by the state. However, states tax employers to cover the cost. When a state's fund is depleted, the Post story says, it may raise the tax to build it back up. Employers' rates are also based on how much their former workers collected.

What can you do if your employer challenges your application?

  • Be prepared and document, document, document. Your employer is keeping a written record of your performance. Be ready to produce your version.
  • Make sure you make your case to the appropriate state officials in the manner required by state law.
  • If your application is turned down, you can appeal. If you haven't consulted a lawyer by now, this may be a good time to do so.
  • Workplace Fairness also says, "If you plan to appeal the denial of benefits, you must continue to file requests or applications for benefits and meet all of the other requirements for obtaining benefits."

Related reading:

Unemployment benefits: Who gets left out?

A blogger's unhappy experience with unemployment benefits

Yes, Virginia, unemployment benefits are taxed

Laid off? Your work's just starting

Original here

GM considering Chapter 11 filing, new company: report

A General Motors vehicle is seen at a car dealership in Toronto December 12,

CHICAGO (Reuters) – General Motors Corp, nearing a Tuesday deadline to present a viability plan to the U.S. government, is considering as one option a Chapter 11 bankruptcy filing that would create a new company, the Wall Street Journal said in its Saturday edition.

"One plan includes a Chapter 11 filing that would assemble all of GM's viable assets, including some U.S. brands and international operations, into a new company," the newspaper said. "The undesirable assets would be liquidated or sold under protection of a bankruptcy court. Contracts with bondholders, unions, dealers and suppliers would also be reworked."

Citing "people familiar with the matter," the story said that GM could also ask for additional government funds to stave off a bankruptcy filing.

GM declined to comment, the story said.

General Motors and Chrysler LLC face a Tuesday deadline to file restructuring plans to the government in exchange for receiving $17.4 billion in federal loans.

Automakers have struggled as U.S. auto sales have tumbled amid a recessionary economy. U.S. auto sales in January tumbled to a 27-year low.

GM has been in talks with bondholders and the United Auto Workers union to get an agreement on a restructuring that would wipe out about $28 billion in debt for the auto maker, sources have told Reuters. However, it appears unlikely a deal could be reached by the Tuesday deadline, they said.

GM has already announced plans to cut 10,000 salaried workers worldwide, or 14 percent of its staff, impose pay cuts for most remaining white-collar U.S. workers and has offered buyouts to its 62,000 U.S. workers represented by the UAW.

In addition, it is trying to sell its Hummer SUV and Swedish Saab brands and is reviewing the status of its Saturn brand.

(Editing by Eric Walsh)

Original here

5 Things You Didn't Know: Wal-Mart

By Ross Bonander

Wal-Mart in Chicago, IL - Credit:

The first Wal-Mart opened in Arkansas in 1962, and the company flourished, thanks to the retail imagination and cutthroat practices of founder Sam Walton. Over four decades later, Wal-Mart is a global behemoth, regularly seeing annual sales in excess of $300 billion, and employing more people -- 1.9 million, according to business research company Hoover’s Inc. -- than any other private employer in the world. If Wal-Mart were its own country, its population would exceed 75 other countries as the 146th most populated nation on Earth. The company has not announced any plans to nationalize, but few concepts -- whether revolutionary or appalling -- seem beyond their consideration.

Wal-Mart exports its borderline free market practices to over a dozen countries led by the Rollback Man -- a mascot who “rolls back prices” and who, in every which way, demonstrates a spectacular lack of imagination. If you don’t know what he looks like, simply imagine a 1970s smiley face on the period at the end of this sentence, then remove any residual indication of personality. Leave it to Wal-Mart not only to employ this two-pencil-strokes-shy-of-a-speck mascot, but also to try to trademark it in 2006, claiming they had a lot invested in the smiley face.

Nonetheless, Forbes’ annual rundown of the world’s wealthiest people must feel like a Walton family reunion: The most recent list alone features five Waltons among the top 30 billionaires.

Despite all of its financial successes, the company can’t open a store without enduring -- and overcoming -- a flood of protest groups. These groups might defend the environment or local store owners, or they might defend the store’s future employees, since Wal-Mart’s reputation for unfair labor practices involves sexual discrimination, denying unionization and offering wages so terrible that some employees have to rely on social services to get by.

Love it or hate it, here are five things you didn’t know about Wal-Mart; your friendly neighborhood retail monstrosity.

1- Every week, over one-third of the U.S. population visits a Wal-Mart

In a country of over 300 million, that comes to an astonishing 100 million Wal-Mart customers per week (127 million if you believe the figure given on the corporate website). Of course, this does not mean 100 million unique customers; that number is unknown, and for this purpose, immaterial. Either way, that’s about as many Americans who voted in the tight U.S. Presidential elections of 2004 (122 million), and it’s substantially more than the number who could have voted but didn’t (78 million).

2- Hillary Clinton was a member of the Board of Directors for six years

In 1986, Wal-Mart welcomed Mrs. Clinton to their board, despite the absence of a vacant seat. At the time, her husband was the governor of Arkansas and she was the state’s First Lady.

Mrs. Clinton served on two other corporate boards during the late 1980s and early 1990s: Little Rock-based TCBY (The Country's Best Yogurt), and she briefly held a position on the board for Lafarge, a huge French industrial company (makers of cement and concrete). She quit all three in 1992, during her husband’s successful presidential run. Curiously, Wal-Mart did not fill her seat on their board when she left.

3- They pioneered a number of discount retail concepts

By “they,” I really mean Sam Walton, since his innovations go back to the early days. Walton improved customer service by extending store hours, staying open on Sundays or on holidays, and by making certain to keep his shelves well-stocked with a variety of cheap -- low-cost, I mean -- products. Wal-Mart has brought these concepts into the computer age. Today, when an item is scanned for purchase at a cash register, it informs an inventory control system, which works with the items manufacturer to keep the shelves stocked. Wal-Mart was among the first major retailers to install such a system.

Yet Walton’s most profound innovation was discount merchandising itself. Buying from the cheapest wholesale supplier allowed him to lower his prices and sell more; the higher sales volume gave him future negotiating power with the supplier, further lowering his prices.

Sam Walton’s early creativity as an entrepreneur has been eclipsed by an uninspired corporate bully with the muscle to do virtually whatever it wants, wherever it is. But don’t be fooled; it’s not as though Sam would be turning over in his grave at the news. Walton died in 1992, and is as much credited as he is criticized for making Wal-Mart what it is today.

4- Only one organization in the world employs more people than Wal-Mart

Wal-Mart’s 1.9 million employees amounts to the biggest private employer worldwide, but when it comes down to sheer employment -- public, private, governmental or otherwise -- Wal-Mart comes in at No. 2.

They have stiff competition for the number-two spot, as both Indian Railways (IR) and England’s National Health Services (NHS) are very close. However, they’ll need to go on a highly unlikely hiring spree in order to reach this list’s No. 1: the Chinese Army. No, this is not a joke. The number of active troops in the Chinese Army is around 2.25 million -- a mere 325,000 more than Wal-Mart.

5- They prefer part-time employees

About one-third of Wal-Mart’s employees work part-time or no more than 28 hours per week. As such, they will naturally have less invested in the company. For example, part-time employees would not see or experience the benefits of a union, favoring Wal-Mart’s well-earned reputation as a union ball-breaker. Their statement on unions is a classic syllogistic fallacy:

“At Wal-Mart, we respect the individual rights of our associates and encourage them to express their ideas, comments and concerns. Because we believe in maintaining an environment of open communications, we do not believe there is a need for third-party representation.”

In other words: Open communication is the function of a union; Wal-Mart’s ideology encourages open communication; therefore, Wal-Mart’s ideology already serves the function of a union.

Wal-Mart’s nebulous definition of unions is not only built on a false premise, but it is also at odds with the one offered by the AFL-CIO, in which unions “solve problems, build stronger workplaces… give workers a voice on the job about safety, security, pay, benefits [and] a voice in government.”

Furthermore, after one year, part-time workers become eligible for a health plan stacked with a massive deductible and whopping premiums, but in light of a 70% per annum turnover rate, most won’t be around that long anyway. That might be for the best since, in their own words, the Wal-Mart medical plan is “designed to protect associates from catastrophic loss and financial ruin.”

Those are big words for poor people; if you’re making so little money that you require social services to supplement your basic needs, how far away are you from financial ruin, anyway?

For all the people searching for the lowest price on an electric toothbrush, there are plenty of others looking into the deluge of complaints and criticisms leveled at Wal-Mart, including the economic impact of store openings, the notoriously low wages, the enormous wealth of the Walton family, the questionable working conditions at overseas stores, the many ongoing lawsuits against them, and their heavy-handed opposition to labor unions.

The public’s interest is best measured by the length of its attention span. Wal-Mart sells merchandise as cheap or cheaper than their competition by using methods that look a lot like the methods of a monopoly, such as predatory pricing. They skirt violations of U.S. anti-trust laws while exploiting people through pathetic wages and flimsy benefits. It’s all terrible, just terrible.

But have you heard about how far back they just rolled the price on a tube of foot cream? Wow!

Original here

FBI expects number of major financial bailout fraud cases to rise

By Josh Meyer

Reporting from Washington -- Despite an expected wave of fraud in the trillion-dollar bailout that aims to stop the ongoing financial meltdown, federal law enforcement officials told Congress on Wednesday that they have nowhere near the level of resources to combat it.

Top FBI and Justice Department officials said they believed mortgage fraud and other types of corporate criminal behavior has contributed to the economic tailspin. And they said they already have more than 2,300 open investigations into suspected illegal financial activity -- including 38 probes specifically linked to the crisis.

Those investigations are already straining the resources of the FBI and the Justice Department, FBI Deputy Director John Pistole and Acting Assistant Atty. Gen. Rita Glavin said in testimony before the Senate Judiciary Committee.

But the problems will worsen exponentially as the economy plunges, and as the Obama administration and Congress spend more than $1 trillion in various bailout and stimulus packages in an effort to forestall foreclosures, corporate bankruptcies and a prolonged economic depression, they said.

Pistole said he expected the number of major investigations to rise into the many hundreds, focusing on big-name companies that "everybody knows about," and to be similar in scope and complexity to the massive probe of energy company Enron Corp. after its collapse in 2001.

In the meantime, the wholesale redeployment of federal agents and prosecutors to counter-terrorism work after the Sept. 11, 2001, attacks has depleted the ranks of financial specialists needed to investigate such cases and bring perpetrators to trial, Pistole said.

The FBI has only 240 agents working on mortgage fraud cases, a fraction of the agents working on the savings and loan failures in the 1980s, Pistole said, adding that the current crisis "obviously dwarfs" the previous one.

The sheer volume of cases is so overwhelming, he said, that agents can focus only on those "systematically trying to defraud the system," including lawyers, brokers and real estate professionals.

Pistole noted that former FBI Assistant Director Chris Swecker warned Congress in 2004 about the looming crisis posed by fraudulent mortgage practices.

The FBI is now doing a "complete scrub" to find ways of redeploying agents to work on financial fraud cases, and is trying to hire and train more people capable of conducting such complex and long-term investigations, Pistole said.

In the meantime, "We need the bodies there," Pistole said. "It is a huge problem that we look forward to addressing as robustly and as aggressively as we can."

Neil Barofsky, the inspector general of the government's financial rescue package, told the panel that making an example of some high-profile lawbreakers is the best use of the government's limited resources.

"They have the most to lose, they're the most likely to flip, and they make the best examples," Barofsky said.

Three senators on the Senate Judiciary Committee, which oversees the Justice Department and the FBI, have sponsored legislation to provide federal authorities with additional funds and some stronger laws to go after mortgage cheats and other financial scammers.

One of them, Chairman Patrick J. Leahy (D-Vt.), told the FBI and Justice Department officials that he wanted to see people prosecuted and sent to jail.

In an interview after the hearing, Leahy said he was dismayed to learn how few FBI agents were being deployed to investigate financial fraud cases, but that his committee would "make sure there are enough people out there to start catching and prosecuting people."

"They will be more aggressive in the future, I can assure you," Leahy said. "This committee is going to keep the pressure on."

Original here

Cuomo blasts Merrill executives on bonus plan

ALBANY, N.Y. - New York Attorney General Andrew Cuomo laid out further details Wednesday about $3.6 billion in bonuses Merrill Lynch & Co. executives received, calling the investment bank’s executives irresponsible.

Cuomo detailed the size and scope of the bonuses in a letter sent to U.S. House Financial Services Chairman Barney Frank.

“In a surprising fit of corporate irresponsibility, it appears that, instead of disclosing their bonus plans in a transparent way as requested by my office, Merrill Lynch secretly moved up the planned date to allocate bonuses and then richly rewarded their failed executives,” Cuomo stated. In the letter, Cuomo said he requested information on Merrill’s expected bonuses as early as Oct. 29, but never received any details about the size of the bonus pool and criteria it planned to use to make the payments.

The Merrill bonuses were paid in late December, just days before Bank of America Corp. completed its purchase of New York-based Merrill. The payments also came as Merrill was on the brink of reporting a more than $15 billion fourth-quarter loss as it has been among the hardest hit by the ongoing credit crisis.

Cuomo said in the letter that Bank of America was apparently complicit in the move to award bonuses before Merrill’s fourth quarter loss was announced.

Both Merrill and Bank of America could face charges of securities fraud in New York as the attorney general’s office investigation unfolds, according to a person familiar with the investigation who requested anonymity because of the ongoing nature of the matter. The person said Cuomo’s office is attempting to determine if proper disclosures were provided to investors about the timing and size of the bonuses as well as the “deteriorating health of Merrill.”

Christopher Bebel, a former federal prosecutor and Securities and Exchange Commission attorney, said the New York attorney general’s office could try to make its case by proving it was necessary for disclosures to be provided because of the abnormal timing of the payments.

“Because (former Merrill Chief Executive John) Thain intended to depart so radically from the well established pattern of bonus payouts, Merrill had an obligation to disclose (the information) to investors, given the enormous amount of money at stake,” Bebel said. Banks traditionally pay out year-end bonuses during the first quarter of the following year.

Bebel said Merrill and Thain’s defense against that claim would likely be to say the company was given the right to make bonus payments as part of the acquisition, and it had no choice but to pay them in late December because Merrill would cease to exist as a stand alone firm beginning Jan. 1.

Bank of America spokesman Scott Silvestri said in a statement that Merrill Lynch was an independent company last year, and its board of directors had ultimate approval over how much to pay employees.

Silvestri said: “Bank of America did urge the bonuses be reduced, including those at the high end. Although we had a right of consultation, it was their ultimate decision to make. In addition, a substantial amount of the Merrill bonuses were contractually guaranteed.”

Bank of America’s Chief Executive Ken Lewis reiterated that stance when questioned about the Merrill bonuses during Congressional testimony Wednesday, saying he had “very limited” involvement in the decision making regarding the payouts.

Lewis said: “And we had no authority to tell them what to do to. Just urge them what to do. We did urge.”

Lewis testified before a Congressional committee along with other banking executives whose firms have received funds from the government.

Cuomo in the letter said four executives at Merrill alone received bonuses totaling $121 million. Nearly 700 employees received a bonus of at least $1 million. The letter did not disclose names of the bonus recipients.

Thain did not take home a 2008 bonus, nor did four other top executives at Merrill: its president and chief operating officer, its president of global wealth management, its chief financial officer and its general counsel.

On the other hand, Bank of America severely slashed its 2008 year-end bonuses. Bank of America’s top executives received no incentive compensation in 2008, and the next level of executives bonus pool was reduced by 80 percent, Silvestri said.

Cuomo has already subpoenaed Thain and Bank of America’s chief administrative officer, J. Steele Alphin, as he investigates the timing of the bonuses. Cuomo is likely to seek testimony from other executives at the banks, according to the letter.

North Carolina’s Attorney General Roy Cooper also has made a request for documents from Bank of America about the bonuses. The state’s Department of Justice last week issued an “investigative demand” seeking records, including a list of Merrill employees who received bonuses. Bank of America, based in Charlotte, N.C., is required to respond by March 4, according to the 11-page demand.

Last month, when news of the bonuses broke, Thain resigned from his new post as head of the wealth management division of the combined bank.

The initial reports of the bonuses came just days after Bank of America received an additional $20 billion from the government that it said it needed to help offset the losses it was absorbing from the Merrill acquisition. The government also promised to cover losses on more than $100 billion in risky assets. The additional support was provided to Bank of America as Lewis showed trepidation about completing the deal to acquire Merrill.

The government helped orchestrate the acquisition of Merrill by Bank of America over the same weekend in September that another investment bank, Lehman Brothers, went under, setting off the most intense period of the financial crisis.

Copyright 2009 The Associated Press.

Original here

Bush Faithful Rewarded With Jobs

On the Way Out, He Placed Aides and Big-Money GOP Donors

By Dan Eggen
Washington Post Staff Writer

Fred F. Fielding, Emmet T. Flood, William A. Burck and Daniel M. Price worked together at the White House under George W. Bush. Less than two weeks before leaving office, Bush made sure the senior aides shared a new assignment, naming them to an obscure World Bank agency called the International Center for Settlement of Investment Disputes.

The appointments are for six years and are potentially lucrative, paying up to $3,000 a day plus travel and other expenses if an appointee is chosen to hear a case. Bush also named two other prominent Republican lawyers to the agency, which attempts to broker international finance disagreements.

Bush made more than 100 such end-of-term appointments to a constellation of presidential boards and panels, such as the President's Council on Physical Fitness and Sports and the U.S.-Russia Polar Bear Commission. Like other presidents, he often turned to close aides and top political supporters to fill the last-minute postings, many of which will outlast President Obama's current term.

Nearly half of Bush's appointments after Election Day were filled by donors who gave a total of nearly $1.9 million to Republicans since 2003, according to an analysis of the postings. At least 20 of the positions were filled by former Bush aides, plus others filled by old hands from the administrations of Richard M. Nixon, Ronald Reagan and George H.W. Bush.

Most of the positions are unpaid and are valued more for their status than for monetary compensation. Yet the appointments show how political connections matter even for the most obscure Washington jobs, and they illustrate the extent to which presidents have an impact well after they leave the White House.

"It's a way for an outgoing president to have some ongoing influence, however modest, after he's gone," said Thomas E. Mann, a Brookings Institution scholar. "It also shows you that a lot of people just like positions, names, titles and affiliations, especially if it came from a presidential appointment."

Carlos M. Gutierrez, Bush's last commerce secretary, now sits on the board of the Woodrow Wilson International Center for Scholars. James W. Holsinger Jr., whom Bush had nominated at one point to be surgeon general, snagged a seat on the fitness council, along with quarterback Eli Manning, figure skater Michelle Kwan and other athletic stars. Condoleezza Rice, in a customary move for former secretaries of state, was named to the board of trustees for the John F. Kennedy Center for the Performing Arts.

Some boards were particularly popular. Bush named a dozen appointees to the council that oversees the U.S. Holocaust Memorial Museum, including former chief of staff Joshua B. Bolten, former homeland security secretary Michael Chertoff, former attorney general Michael B. Mukasey, and Elliott Abrams, who was an aide to Reagan and George H.W. Bush. Two major GOP donors -- real estate billionaire Alan I. Casden and former public broadcasting chairman Cheryl F. Halpern -- were also on the list.

The nation's top military colleges were also sought-after destinations. For the U.S. Air Force Academy board of visitors, Bush named former congressman Robin Hayes (R-N.C.), former U.S. trade representative Susan C. Schwab and former White House physician Richard J. Tubb. Fred Malek, who was an aide to Nixon and the elder Bush, was appointed to the board overseeing the U.S. Military Academy at West Point, N.Y., while former congresswoman Nancy L. Johnson (R-Conn.) was named to the U.S. Naval Academy board in Annapolis.

The wide array of presidential appointments "perpetrates a merry-go-round of personalities," said Marthena Cowart, spokeswoman for the Project on Government Oversight, a watchdog group. "Once you get on the merry-go-round, you never get off, whether you belong there or not."

Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington, said that while many of the appointments owe to vanity or good causes, some are also useful for maintaining political influence. "The real question is not only whether they are paid, but what benefits can they pay out from these boards," she said.

Consider the Advisory Committee for Trade Policy and Negotiations, the U.S. government's senior trade advisory panel, which favored several of the free-trade agreements that Bush was unable to push through Congress.

Bush named three members to the panel on Christmas Eve: Carol Ann Bartz, chief executive of Yahoo, who donated about $35,000 to Bush and other Republicans over the past six years; Maria Cino, who organized the 2008 Republican National Convention; and Israel Hernandez, who worked in the Commerce Department and the Bush White House. Their terms last through 2012, allowing them to play a role in influencing trade policy throughout Obama's term.

Many of the appointees had no clear political connections, particularly on some of the more obscure or scientific panels, such as the Nuclear Waste Technical Review Board and the President's Committee on the National Medal of Science.

The World Bank's settlement center, based in Washington, bills itself as the "leading international arbitration institution" for disputes between nation-states and private corporations. Four White House aides were appointed to the agency on Jan. 6 as conciliators or arbitrators: Fielding, who was chief White House counsel; Flood, a special counsel; Burck, an associate counsel; and Price, a deputy national security adviser. J.C. Boggs, president of the Republican National Lawyers Association, and Ronald A. Cass, who served under Reagan and the elder Bush, were also named.

Conciliators and arbitrators earn "$3,000 per day of meetings or other work performed in connection with the proceedings, as well as subsistence allowances and reimbursement of travel expenses," according to the center's published fee schedule.

But David Theis, a World Bank spokesman, said the agency is set up like a pool, with up to eight appointees from each of the agency's 143 member countries. As a result, he said, about 80 percent of them never participate in a case, and therefore receive no pay.

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Madoff Wife Withdrew Funds, Says State

Bernard Madoff's wife withdrew $15.5 million from a Madoff-related brokerage firm in the weeks before Mr. Madoff was arrested, according to documents that raise questions about how much Mrs. Madoff knew about her husband's business, now alleged to be a Ponzi scheme that he has told authorities he perpetrated alone.

The disclosure, from the securities division of the Massachusetts Secretary of the Commonwealth, came as part of its complaint Wednesday that also offers new evidence of the close relationship between Bernard L. Madoff Investment Securities LLC and the brokerage firm, called Cohmad Securities.

Cohmad's New York operations were ensconced within ...

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Five Reasons the Markets Don't Like the Bank Bailout

By: Jeff Cox,

Wall Street's message to the Obama administration was clear Tuesday, even if the plan to save the banking industry wasn't.

Unhappy with a lack of clarity in Treasury Secretary Timothy Geithner's new financial rescue plan, investors launched a massive stock selloff, raising further questions about when confidence would be restored to the market.

NYSE trader
Oliver P. Quilla for
NYSE trader

From the squishy rhetoric about how complex the problem is to the lack of a clear time-frame for when specific weaknesses in the financial sector would be addressed, Geithner's speech did nothing to assuage the market's concerns about the nation's future.

Broadly speaking, reaction to the speech broke down into five areas:

1. There Really is No 'Change'

"I'm really underwhelmed by the plan," says David Twibell, president of wealth management for Colorado Capital Bank in Denver. "Maybe there's not much that can be done right now other than let this work itself out."

For someone who ran last year as an agent of change, President Obama's plan for banks seemed to represent more of the same. While investors were looking for some concrete moves on how distressed assets would be taken off banks' books, they instead walked away from Geithner's speech with no indication of how the assets would be priced or who would be buying them.

And as one of Wall Street's oldest maxims goes, the market hates uncertainty.

"I think we need to see exactly how this program is going to work," Twibell says. "Maybe that will give the markets a little more comfort level."

But for many, the plan offered little real guidance for how to invest going forward, save for a promise to help buoy small business.

"Zero has changed," said Michael Cohn, chief market strategist at Atlantis Asset Management in New York. "Everyone knew everything except the issue with doing something positive for small business. There's no clarity on whether they can repeal the mark-to-market (accounting rules). I don't know how they're going to do it."

2. A Far Cry From Finished

If the administration was purposely setting out a general plan with the specifics to be crafted by Wall Street, then it may have accomplished something.

Treasury Secretary Nominee Timothy Geithner
Treasury Secretary Timothy Geithner

With so many details left unsolved, much more work will have to be done, again creating uncertainty for investors.

"It's going to be fine-tuned many times over," predicts Quincy Krosby, chief market strategist at The Hartford. "Given the enormity of the problem it's clear that certain parts will work and certain parts won't work, but it's a start."

The market is clamoring to know how the government will be able to help banks with their toxic assets while also protecting investors and taxpayers from getting blindsided if the fixes don't work.

"The devil's going to be in the details with this stuff," Twibell says. "We're still back to the old problem of how you price that, how you structure that."

3. Treasury Bubble Still Popping

While Treasurys rallied Tuesday on a further flight to safety, government debt prices are likely to fall as more and more supply comes on line while the government finances the bank rescue.

For Investors

The predicted trend reflects the difficulty the government will face getting a premium on bills it will be in a hurry to unload.

"The idea that you can just borrow and spend, borrow and spend, run ever-larger deficits and essentially print money with no consequences is economically naive," says Mike Larson, analyst for Weiss Research's Money & Markets newsletter. "Yet no one seems to be talking about the unintended consequences until now."'

Larson called the popping of the bond bubble months ago and sees the trend continuing as the government accumulates more and more debt.

Moreover, he said the pressure on Treasurys will cause interest rates to rise and thwart hopes of mortgage rates falling to 4.5 percent or even lower, a prediction made Monday by Bill Gross, co-CEO of Pimco, the world's largest bond fund.

"The longer-term trend is clearly for lower prices and higher rates as a result of this supply issue," Larson says.

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Content, Once King, Becomes A Pauper

media content newspaper
A Newspaper vendor

Up until very recently, perhaps as recently as six months ago, the prevailing wisdom among analysts who covered the media industry was that "content is king." It is an inexact way of looking at what editors, photographers, actors, producers, and reporters create.

Movies, TV shows, magazines, radio programming and high-quality internet content were viewed as having a significant intrinsic value. The best content can be moved from one medium to another, increasing its value even further. TV shows can be played on TVs, PCs, and handsets. Newspaper content can run on a printed page or on the internet. Radio can be broadcast from satellites or radio towers. (See pictures from the 2009 BAFTA Awards.)

The value of content has never been ethereal. It has always been directly tied to what owners could "get" for it, either through advertisers or subscribers. For content to have a value, it could never be free. Its position as royalty depended on that.

Content is rapidly being devalued. The first people to press that case are accountants. They have insisted that companies from News Corporation (NWS) to The New York Times (NYT) to Time Warner (TWX) to CBS (CBS) write-down tens of billions of dollars in assets. Cablevision (CVC) bought the large daily newspaper Newsday less than a year ago. Its accountants reduced the value of that property by 70%. That was not simply the value of the Newsday building. What they were saying is that the income from the property has been impaired, probably permanently.

Yahoo! (YHOO) and Time Warner were downgraded by a Wall St. analyst yesterday. His reason for cutting Time Warner is that, once its cable systems have been spun-out to shareholders, its crown jewels which include Time Inc, AOL, and networks such as CNN were not worth the multiple at which the company trades. The essence of his argument is that content, even the best content, is losing its value.

Part of the problem with content value is tied directly to the recession. Accountants should take it easy when they lean on that too hard. The best assets bounce back when the economy recovers. But, by forcing companies to write-down their content assets so extremely they are saying that the firms can never go home again. Their TV shows, movies, magazines, and newspapers will never recover all of their value.

Making the case that newspapers cannot recoup their value is fairly easy. The argument has moved beyond that part of the media industry. The value of feature films is under attack. DVD sales used to drive a lot of the profit from movies. Consumers are getting what they used to see on DVD from the internet. They now often pay less than they did for the physical copy of a film. In many cases, the internet can be used to get the film without paying at all. And, it is easier than sneaking into a movie theater undetected.

The internet has already proved to be an imperfect place for the film and TV industries to make money. YouTube, Google's (GOOG) video-sharing site, has always had the lion's share of the online video audience. Virtually all of the content there is free. Visitors do not watch advertising or pay a fee. NBC has tried to set up a large video site that does capture revenue. only has high-end TV and films. There are commercials that run on every program. But, a number of the advertisements running at Hulu now are free public service spots. The yield for the content owners is, in some cases, next to nothing.

No one knows to what extent content will be "re-valued" as the economy improves. The newspaper industry may not be able to get any of its value back. Magazines may face the same problem. To the surprise of many, some of the more valuable content, like expensive feature films, may only make a great deal of money in theaters. The yield from VOD on the internet sales and syndication on the Apple (AAPL) iPod may turn out to be extremely modest.

The largest media companies are making the case that the only reason their asset values have dropped is the economy. That case may not hold up.

Douglas A. McIntyre

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Pictured: The supergun that kills from a mile - and the camouflaged crackshots using it against the Taliban

By Christopher Leake

British Army snipers call it 'the Silent Assassin' and it is the weapon the Taliban fear the most.

It is the British-made L115A3 Long Range Rifle which, in recent weeks, has killed scores of enemy fighters in Afghanistan.

In a new initiative on the front line, the Army is using sniper platoons to target the Taliban and 'The Long', as the snipers call it, can take out insurgents from a mile away.

Army sniper Yuppie in his home-made camouflage suit

Made to measure: Army sniper Yuppie in his home-made camouflage suit

Many of the elite marksmen who use the rifle make their own extraordinary suits of camouflage to stay hidden from the Taliban.

Some have been known to go 'under cover' for two days while they pick off the enemy.

Last week Army snipers were training with the rifle and full camouflage on the snow-covered ranges of the Support Weapons School at the Land Warfare Centre at Warminster, Wiltshire.

Enlarge The L115A3 Long Range Rifle

Deadly: The rifle is known as 'The Long' and can take out insurgents from a mile away

One of them, known as Yuppie, said: 'You could call it made-to-measure camouflage.

'This one is green string tied into sheets, then covered in straw with straps attached so it fits tight. It took three months and a lot of patience to make.'

His comrade Dean, who like Yuppie is a veteran of Iraq, Afghanistan, Bosnia and Northern Ireland, said: 'I wouldn't say us snipers are an elite, but we think we're a cut above the rest.'

The L115A3 Long Range Sniper Rifle - based on a weapon used by the British Olympic shooting team - weighs 15lbs, fires 8.59mm rounds and has a range of 1,100-1,500 yards.

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Blackwater Changes Its Name to Xe

RALEIGH, N.C. (AP) — Blackwater Worldwide is abandoning the brand name that has been tarnished by its work in Iraq, settling on Xe (pronounced zee) as the new name for its family of two dozen businesses.

Blackwater Lodge and Training Center, the subsidiary that conducts much of the company’s overseas operations and domestic training, has been renamed U.S. Training Center Inc., the company said Friday.

The company’s rebranding effort grew more urgent after Blackwater guards in Baghdad were involved in a shooting episode in September 2007 that left 17 Iraqi civilians dead.

Blackwater’s president, Gary Jackson, said in a memo to employees that the new name reflected the company’s shift away from providing private security. He has said the company is going to focus on training.

Last month, Iraqi leaders said they would not renew Blackwater’s license to operate in Iraq; the State Department said later that it would not renew Blackwater’s contract to protect diplomats when it expired in May.

A Blackwater spokeswoman, Anne Tyrrell, acknowledged the need to shake the company’s past in Iraq. “Certainly that is an aspect of our work that we feel we were defined by,” she said.

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Iraq vet: We're losing 'more soldiers to suicide than to al Qaeda'

David Edwards and Muriel Kane

The Army's suicide rate is the highest it has been in three decades, and a week-long series of articles at has been highlighting what it calls "habitual mistreatment behind the preventable deaths."

Paul Rieckhoff, the founder and executive director of Iraq and Afghanistan Veterans of America, told MSNBC's Rachel Maddow on Thursday, "In January, we lost approximately 24 soldiers in the Army to suicide. That's more folks than we lost in combat. ... We lost more soldiers to suicide than to al Qaeda."

"If we lost that many soldiers to an enemy weapon system, the entire country would be outraged," Rieckhoff continued. "The Pentagon would be scrambling to do something about it. We need the same level of urgency around these suicides."

Rieckhoff's group has been lobbying Congress this week to do more for veterans needs. "We took dozens of veterans from around the country," he told Maddow proudly. "We met with over a hundred lawmakers, we held two press events. ... We highlighted ... the need for mandatory mental health counseling and we called for advance funding of the VA."

Rieckhoff said that there's bipartisan support in Congress for such funding, which is critical because "every year the VA budget is late, and VA's around the country are forced to ration care." However, there's also a critical shortage of mental health counselors.

"This is a place where President Obama can step up," Rieckhoff remarked. "He could issue a national call to service and say, 'If you are a qualified mental health care professional, your country needs you. Help our soldiers, help our veterans. It doesn't matter how you stand on the war. You can step up and make a difference here.'"

"Troops alone are not the answer [to Afghanistan]," he added. "It's not an antidote to violence. You don't just drop 30,000 troops in, wave a magic wand and call it democracy, and make it look like New Jersey."

This video is from MSNBC's The Rachel Maddow Show, broadcast Feb. 12, 2009.

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Prominent Orchard Park man charged with beheading his wife

News Staff Reporter

Muzzammil Hassan, right, founder of Bridges TV, is charged with murder in the beheading of his wife, Aasiya Hassan, left, in Orchard Park.

Orchard Park police are investigating a particularly gruesome killing, the beheading of a woman, after her husband — an influential member of the local Muslim community — reported her death to police Thursday.

Police identified the victim as Aasiya Z. Hassan, 37. Detectives have charged her husband, Muzzammil Hassan, 44, with second-degree murder.

"He came to the police station at 6:20 p.m. [Thursday] and told us that she was dead," Orchard Park Police Chief Andrew Benz said late this morning.

Muzzammil Hassan told police that his wife was at his business, Bridges TV, on Thorn Avenue in the village. Officers went to that location and discovered her body.

Muzzammil Hassan is the founder and chief executive officer of Bridges TV, which he launched in 2004, amid hopes that it would help portray Muslims in a more positive light.

The killing apparently occurred some time late Thursday afternoon. Detectives still are looking for the murder weapon.

"Obviously, this is the worst form of domestic violence possible," Erie County District Attorney Frank A. Sedita III said today.

Authorities say Aasiya Hassan recently had filed for divorce from her husband.

"She had an order of protection that had him out of the home as of Friday the 6th [of February]," Benz said.

Muzzammil Hassan was arraigned before Village Justice Deborah Chimes and sent to the Erie County Holding Center.

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Unredacted documents reveal prisoners tortured to death

Stephen C. Webster

The American Civil Liberties Union has released previously classified excerpts of a government report on harsh interrogation techniques used in Iraq, Afghanistan and Guantanamo Bay. These previously unreported pages detail repeated use of "abusive" behavior, even to the point of prisoner deaths.

The documents, obtained by the ACLU under a Freedom of Information Act request, contain a report by Vice Admiral Albert T. Church, who was tapped to conduct a comprehensive review of Defense Department interrogation operations. Church specifically calls out interrogations at Bagram Air base in Afghanistan as "clearly abusive, and clearly not in keeping with any approved interrogation policy or guidance."

The two unredacted pages from the Church report may be found here.

The ACLU's release comes on the same day as a major FOIA document dump by three other leading human rights groups: Documents which reveal the Pentagon ran secret prisons in Bagram and Iraq, that it cooperated with the CIA's "ghost detention" program and that Defense personnel delayed a prisoner's release to avoid bad press.

"In both cases, for example, [prisoners] were handcuffed to fixed objects above their heads in order to keep them awake," reads the document. "Additionally, interrogations in both incidents involved the use of physical violence, including kicking, beating, and the use of "compliance blows" which involved striking the [prisoners] legs with the [interrogators] knees. In both cases, blunt force trauma to the legs was implicated in the deaths. In one case, a pulmonary embolism developed as a consequence of the blunt force trauma, and in the other case pre-existing coronary artery disease was complicated by the blunt force trauma."

In a press release, the ACLU summarized the documents as detailing, "[An] investigation of two deaths at Bagram. Both detainees were determined to have been killed by pulmonary embolism caused as a result of standing chained in place, sleep depravation and dozens of beatings by guards and possibly interrogators. (Also reveals the use of torture at Gitmo and American-Afghani prisons in Kabul).

"[An] investigation into the homicide or involuntary manslaughter of detainee Dilar Dababa by U.S. forces in 2003 in Iraq.

"[An] investigation launched after allegations that an Iraqi prisoner was subjected to torture and abuse at 'The Disco' (located in the Special Operations Force Compound in Mosul Airfield, Mosul, Iraq). The abuse consisted of filling his jumpsuit with ice, then hosing him down and making him stand for long periods of time, sometimes in front of an air conditioner; forcing him to lay down and drink water until he gagged, vomited or choked, having his head banged against a hot steel plate while hooded and interrogated; being forced to do leg lifts with bags of ice placed on his ankles, and being kicked when he could not do more.

"[An] investigation of allegations of torture and abuse that took place in 2003 at Abu Ghraib.

"[And an] investigation that established probable cause to believe that U.S. forces committed homicide in 2003 when they participated in the binding of detainee Abed Mowhoush in a sleeping bag during an interrogation, causing him to die of asphyxiation."

"A large portion of the torture, maiming, and murder of detainees occurred under authority issued under secret rules of engagement in the Pentagon," wrote Scott Horton, a contributing editor with Harper's magazine. "Much of this flowed through Undersecretary of Defense for Intelligence Stephen Cambone, a figure who has so far evaded scrutiny in the torture scandal and now serves as vice president for strategy of QinetiQ North America, a subsidiary of the United Kingdom-based defense contractor QinetiQ. Even the Senate Armed Services Committee review fails to get to the bottom of Dr. Cambone, his interrogations ROEs for special operations units he controlled, and the death, disfigurement and torture of prisoners they handled. This is one of many reasons why a comprehensive investigation with subpoena power is urgently needed. But full airing of the internal investigations already conducted by the Department of Defense is an essential next step."

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Sex offender challenges state database

By Dan Horn

Federal probation officers are demanding that sex offenders in Ohio register their names with a state database even if the state doesn’t require it.

A Cincinnati man challenged the practice in a federal lawsuit Wednesday, claiming it was unconstitutional and a waste of taxpayer dollars.

The man, identified only as “John Doe” in the suit, was convicted of sexual battery in 1993 and completed his sentence for that crime in 1997. He currently is on federal probation for a drug offense.

The Ohio Justice & Policy Center sued on the offender’s behalf after his probation officer ordered him to place his name on Ohio’s registry of sex offenders, even though the state exempts him from the database because he served his sentence before the registry law took effect in the late 1990s.

Search for sex offenders in our Data Center

The lawsuit says the registration requirement violates the offender’s rights and also is unconstitutional because it allows the federal government to trump a state law.

“There is no question he does not have to register under state law,” said Margie Slagle, an attorney with the Ohio Justice & Policy Center. “The feds think they can ignore Ohio’s wishes and make him register. It’s just bizarre.”

Federal officials declined comment Thursday. But a lawyer for Hamilton County Sheriff Simon Leis, who maintains the registry in Hamilton County, confirmed the county has been registering offenders at the request of federal probation officers.

“The bottom line is we have had guys showing up with an order from a probation officer saying, ‘I’m required to register,’” said Dave Stevenson, an assistant county prosecutor. “So we register them.”

He said the probation officers tell the offenders they must register under the federal Adam Walsh Child Protection Act, which compiles state sex offender databases from across the country. Each state has its own rules, however, and Ohio’s exempts many offenders who committed crimes long ago.

Stevenson said Hamilton County has opted to register those offenders even though some other Ohio counties have refused.

Slagle said few offenders – maybe a dozen or so – were required to register under orders from the probation officers. But she said the practice should end because it is illegal and costly, especially in a county struggling with budget cuts and layoffs.

“The sheriff should not be wasting tax dollars chasing down offenders that the state of Ohio does not require them to chase,” Slagle said. “It’s a waste of money.”

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U.S. now sees Iran as pursuing nuclear bomb

By Greg Miller

Reporting from Washington -- Little more than a year after U.S. spy agencies concluded that Iran had halted work on a nuclear weapon, the Obama administration has made it clear that it believes there is no question that Tehran is seeking the bomb.

In his news conference this week, President Obama went so far as to describe Iran's "development of a nuclear weapon" before correcting himself to refer to its "pursuit" of weapons capability.

Obama's nominee to serve as CIA director, Leon E. Panetta, left little doubt about his view last week when he testified on Capitol Hill. "From all the information I've seen," Panetta said, "I think there is no question that they are seeking that capability."

The language reflects the extent to which senior U.S. officials now discount a National Intelligence Estimate issued in November 2007 that was instrumental in derailing U.S. and European efforts to pressure Iran to shut down its nuclear program.

As the administration moves toward talks with Iran, Obama appears to be sending a signal that the United States will not be drawn into a debate over Iran's intent.

"When you're talking about negotiations in Iran, it is dangerous to appear weak or naive," said Joseph Cirincione, a nuclear weapons expert and president of the Ploughshares Fund, an anti-proliferation organization based in Washington.

Cirincione said the unequivocal language also worked to Obama's political advantage. "It guards against criticism from the right that the administration is underestimating Iran," he said.

Iran has long maintained that it aims to generate electricity, not build bombs, with nuclear power. But Western intelligence officials and nuclear experts increasingly view those claims as implausible.

U.S. officials said that although no new evidence had surfaced to undercut the findings of the 2007 estimate, there was growing consensus that it provided a misleading picture and that the country was poised to reach crucial bomb-making milestones this year.

Obama's top intelligence official, Dennis C. Blair, the director of national intelligence, is expected to address mounting concerns over Iran's nuclear program in testimony before the Senate Intelligence Committee today.

When it was issued, the NIE stunned the international community. It declared that U.S. spy agencies judged "with high confidence that in fall 2003, Tehran halted its nuclear weapons program."

U.S. intelligence officials later said the conclusion was based on evidence that Iran had stopped secret efforts to design a nuclear warhead around the time of the U.S. invasion of Iraq.

Often overlooked in the NIE, officials said, was that Iran had not stopped its work on other crucial fronts, including missile design and uranium enrichment. Many experts contend that these are more difficult than building a bomb.

Iran's advances on enrichment have become a growing source of alarm. Since 2004, the country has gone from operating a few dozen centrifuges -- cylindrical machines used to enrich uranium -- to nearly 6,000, weapons experts agree.

By November, Iran had produced an estimated 1,400 pounds of low-enriched uranium, not nearly enough to fuel a nuclear energy reactor, but perilously close to the quantity needed to make a bomb.

A report issued last month by the Institute for Science and International Security concluded that "Iran is moving steadily toward a breakout capability and is expected to reach that milestone during the first half of 2009." That means it would have enough low-enriched uranium to be able to quickly convert it to weapons-grade material.

Tehran's progress has come despite CIA efforts to sabotage shipments of centrifuge components on their way into Iran and entice the country's nuclear scientists to leave.

Iran still faces considerable hurdles. The country touted its launch of a 60-pound satellite into orbit this month. Experts said Iran's rockets would need to be able to carry more than 2,000 pounds to deliver a first-generation nuclear bomb.

And there are indications that the U.S. and Iran are interested in holding serious diplomatic discussions for the first time in three decades. Iranian President Mahmoud Ahmadinejad said this week that his nation was "ready to hold talks based on mutual respect," and Obama indicated that his administration would look for opportunities "in the coming months."

Hassan Qashqavi, spokesman for Iran's Foreign Ministry, on Wednesday warned the U.S. not to wait for Iranian presidential elections this year, because ultimate authority rests with supreme leader Ayatollah Ali Khamenei.

He also said Iran would be patient.

"Since a new administration came to power in the U.S., we do not want to burn the opportunity of President Obama and give him time to change the reality on the ground," Qashqavi said.

But experts said Iran was now close enough to nuclear weapons capability that it may be less susceptible to international pressure.

"They've made more progress in the last five years than in the previous 10," Cirincione said.

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I was forced to abduct my daughter

Elizabeth Prosser and Tamara

Elizabeth Prosser and Tamara. Photograph: Elizabeth Prosser

I spend most of my life in bed and in constant pain. I suffer from Crohn's disease, acute fibromyalgia, and epilepsy. Daily life is already a struggle, but soon I could be extradited from Wales to the United States for abducting my daughter.

If the extradition goes ahead, I'm not sure I'll survive the flight, let alone a court case or jail sentence. I always thought extradition was for terrorist suspects or major criminals, not people like me. I'm a 58-year-old British woman and held responsible jobs until my illness forced me to stop working four years ago.

I used to work for the American embassy. When I was 27 I moved to the Netherlands from the UK with my first husband, and began a job promoting US trade. We had three children together, but the marriage did not last and we divorced in 1982. My husband returned to the UK, and my mother moved in to help look after the children. For 12 years we were all very happy.

When my oldest son was 15 he got a scholar-ship to Manchester University and afterwards won a full scholarship to do his PhD in the US. My other children were all happy to move there and thanks to my work at the embassy, I was granted a five-year business visa in 1990. My mother, the children, our two great danes and five cats, packed up and moved to Pennsylvania where I started working as an export consultant.

Shortly after arriving, I met a local musician called Michael, and we began a relationship. Two years later, to my amazement, I became pregnant at 42. I was overjoyed and my older children, who were by now all married to US citizens, were delighted.

When my daughter Tamara was born I carried on working until 1995 when my visa was due for renewal. I had assumed this would be a formality so was shocked to be told there were too many business visas in circulation.

I was granted just a six-month extension. This was a real problem. My mother's visa had also expired and she returned to the UK. As I could not leave my children I felt I had no choice but to work illegally. Michael and I ended our relationship and it was agreed that I would bring Tamara up.

Then, to my horror, I was arrested for overstaying my visa and working illegally and placed in the local jail for six months. Conditions were grim and I was in a very small cell with four other women charged with similar offences. Michael had agreed to look after Tamara and when I was released on bail I went to court to get her back. A joint custody order was issued in 1997, making me responsible for my daughter's school fees, her clothes and effects, but allowing her father visitation rights. If I had left the US without Tamara, I would not have been able to return to the US for 10 years. And no American court would have allowed her visitation rights to another country.

As I could not live on thin air, let alone support my daughter, I began working for a local magazine. In January 1998, I was tipped off that I was going to be re-arrested and sent back to the UK alone. My three older children were all settled, but I couldn't bear the thought of being separated for ever from my five-year-old daughter - what mother could? Panic-stricken and distraught, I bought air tickets to Ireland and, despite a custody order stating Tamara could not be taken out of Pennsylvania, she and I fled the US. I did not tell Michael and he was understandably less than pleased.

We moved to Scotland, where I got a part-time job working in a holiday village. Tamara started school and although I was scared of what might happen next, I had a wonderful eight months with her. If I had my time over again I would do the same thing - the thought of being separated from her was unbearable.

One day at 6am came the knock on the door I was dreading. The police arrested me and bundled us into a car. After being driven to a car park several miles away, Tamara was snatched from my arms. I felt physically sick and she kept screaming, "I want to stay with my mummy, please don't take me away from my mummy." I was put on a plane to Heathrow with no idea what had happened to Tamara. Much later I learned that she had been put on a private jet to the United States. She was just six years old.

On arrival at Heathrow airport I was charged with kidnapping and put on remand in HMP Holloway for six months. The prison staff were sympathetic and treated me well and after six months I was out on bail. Nine months after I was arrested for abducting my daughter charges of obtaining money by deception were laid against me relating to my illegal work in the US, charges that I am vigorously fighting.

Eleven years later I remain on bail. I may not leave the principality of Wales. I may not travel. I must reside at our home.

I explored all kinds of legal options to get my daughter back, but nothing worked. I kept writing and sending gifts to my daughter's father but for two years I heard nothing. Then one day in 2001, Tamara called me. She had found one of my letters and seen my phone number. I was overjoyed to hear her voice and we stayed in regular touch by phone, letter and email.

I longed to be with her and became so depressed I sought psychological counselling where I was diagnosed with severe post-traumatic stress disorder. Luckily I met a wonderful man, Phil, and we married in 2002. But two years later, I was taken ill and my health deteriorated sharply.

Last year, to my delight, Tamara and her father came to visit us. When my daughter and I saw each other again we clung to each other for hours. I showed her some of the clothes that she'd worn the day before she was snatched - she couldn't believe I'd kept them all this time. We did not stop talking for days. With her dad's blessing she's planning to go to a Welsh university in 2010 so that she can be near me. She's very angry about what happened, but Michael has done a wonderful job of bringing her up. He does not support the extradition order and has asked his attorney to oppose it.

A sword of Damocles is hanging over us as we wait to see whether I will be extradited. I'm not a baby snatcher. I brought my own daughter to the UK because I couldn't bear to be apart from her.

I'm in very poor health. Crohn's disease has attacked my digestive system and I have a colostomy bag. I have been prescribed liquid morphine to ease the pain. A senior criminal attorney in Pennsylvania said with the inadequate health facilities available in the US prison system I would be likely to "languish in pain". If I'm extradited to the US there will be no future for me. A previous attempt to extradite me was quashed in 2005 by the then home secretary Charles Clarke. But in December government ministers upheld the earlier decision to order my surrender to the US. My solicitor is challenging this and my MP is urging the Home Office to prevent the extradition.

If I'm imprisoned in the US, Tamara cannot visit as she is a party in my crime. My mother is 89 and my husband cares for her, so we are also unlikely to see each other again. The home secretary could stop the extradition order. If I'm forced on to that plane it won't be extradition, it will be execution.

• Liz Prosser was talking to Diane Taylor.

• Do you have a story to tell about your life? Email it to If possible, include a phone number

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Details in gay student's slaying are revealed in prosecution brief

By Catherine Saillant

Lawrence "Larry" King wasn't sexually harassing fellow eighth-grade student Brandon McInerney in the weeks leading up to King's shooting death, prosecutors contend in court documents.

McInerney was the aggressor, teasing the effeminate King for weeks and vowing to "get a gun and shoot" him, according to a prosecution brief. Multiple students provided accounts of a growing hostility between the two boys, the document shows.

Their dispute ended in tragedy a year ago today when McInerney allegedly armed himself with a .22-caliber revolver and shot King in the back of the head twice in an Oxnard classroom as the school day was beginning.

"In the days before the shooting, the defendant tried to enlist others to administer a beating to Larry," Deputy Dist. Atty. Maeve Fox wrote in a "statement of facts" filed with the brief. "When that failed for lack of interest, he decided to kill Larry."

Prosecutors said they provided their most detailed account to date of the events leading to the classroom killing to counter the defense's argument that murder charges against McInerney, then 14, were improperly filed in adult court.

Defense attorney Scott Wippert contends that Ventura County Dist. Atty. Gregory Totten abused his discretion in deciding to try McInerney as an adult rather than filing charges in juvenile court. Fox said she filed the statement of facts in December to show that the case was filed properly.

The Ventura County Star published details from the document this week.

"It was an absolutely brutal crime, with premeditation and deliberation," Fox said Wednesday. "He was familiar with firearms and had fired that gun before. He knew what he was doing."

Wippert said the prosecution filing was a "one-sided version of the facts." He said it was meant to sway the jury pool before the case reaches trial.

"We don't know if any of this version of what she says happened will ever go before a court of law," Wippert said. "It was irresponsible to release it."

The one-year anniversary of the shooting is being marked in Ventura County by a candlelight march and vigil organized by a local gay-rights group. Similar memorials are being planned across the state, said Jackie Downing of the Gay-Straight Alliance Network in San Francisco.

King's death struck a chord with parents, teachers, students and gay-rights advocates concerned that McInerney's alleged bullying of King had been minimized by school authorities.

Since King's death, teachers have sought training in how to identify gay and lesbian students who might be struggling with their sexual identity. Teachers also have asked for resources to help students who have already come out or who may be experiencing bullying.

In her statement of facts, Fox contends that King and McInerney had an acrimonious relationship for months prior to the shooting. They sparred with "typical 8th grade, back-and-forth insults; some sexual, some not," she wrote.

Witnesses said King was usually not the aggressor. But after months of teasing by McInerney and other male students who called him "faggot," he had began to retort, according to prosecutors.

The day before the shooting, the two boys were bickering during seventh period. When King left, a student witness said that McInerney commented, "I'm going to shoot him."

Just after that class, another student heard King say "I love you" to McInerney as they passed in a hallway. The same student then heard McInerney say he was "going to get a gun and shoot" King, according to prosecutors.

A few minutes later, prosecutors allege, McInerney told one of King's friends: "Say goodbye to your friend Larry because you're never going to see him again."

The prosecution brief also reveals for the first time that McInerney was familiar with firearms, and that he had used that particular weapon in the past during target shooting with his family.

Investigators found a training video in his possession titled "Shooting in Realistic Environments," as well as skinhead and neo-Nazi books and similar writings from the Internet, prosecutors wrote.

"I had to tell the court what we knew at the time the decision was made to file in adult court," Fox said. "So that's what I did."

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